Barry Callebaut has pledged to bring 500,000 cocoa farmers out of extreme poverty and eradicate child labor in its supply chain under an initiative to source fully sustainable cocoa by 2025.

The world’s largest cocoa processor – which processes 23% of the global crop – will launch its sustainability strategy ‘Forever Chocolate’ on November 28.

23% sustainable cocoa

Barry Callebaut sourced 23% of its cocoa from its definition of sustainable cocoa in 2015/16, up from 17% the prior year.

The pledge​

Under the pledge, the chocolate and cocoa ingredients supplier has promised to lift 500,000 cocoa farmers out of the World Bank’s definition for extreme poverty ($1.90 per day) by 2025.

It also hopes to eradicate child labor from its cocoa supply chain and become carbon and forest positive by the same date.

By 2025, Barry Callebaut will only work with raw material suppliers (palm oil, vanilla, sugar, soy lecithin, soy oil, hazelnuts, vanilla, coconut and dairy) that meet its definition of sustainability.

The company hopes this will ensure 100% of Barry Callebaut’s cocoa ingredients, chocolate and other products are sourced sustainably by 2025.

Source: Barry Callebaut.

Poverty eradication key ​

Nicko Debenham, vp of cocoa sustainability at Barry Callebaut, said: “The cornerstone for us is poverty.​

“If we manage to get farmers out of poverty then we will help to reduce incidences of child labor. We will also reduce our footprint from out sourcing because we’ll be doubling the amount of cocoa coming from the same plot of land.”​

He said that major industry chocolate players and retailers, particularly in the UK such as Tesco and M&S, support Barry Callebaut’s latest strategy. He said the challenge will be emerging market customers where sustainable chocolate is still in its infancy.

Barry Callebaut is running education programs on child labor in West Africa, where Tulane University found around 2.03m children engaged in harzardous cocoa work in 2013/14.

Zero child labor​

Barry Callebaut will use the International Labour Organization (ILO)​​ definition of child labor to eliminate work in its supply chain that ‘deprives children of their childhood, their potential and their dignity, interferes with their schooling and is harmful to physical and mental development’.​

Work such as carrying heavy loads or using fertilizers will be prohibited for children in the company’s supply chain by 2025.

Barry Callebaut is currently running two Child Labor Remediation & Monitoring System (CLMRS) pilots with the International Cocoa Initiative (ICI) and plans to expand the pilot to two new cooperatives in West Africa.

It will also partner with origin governments and plans to strengthen its women empowerment programs to help ensure children attend school.

Around 71% of children in Côte D’Ivoire attend school and the population has a 43% literacy rate.

Suppliers of other commodities to Barry Callebaut such as sugar will also be expected to have child labor prevention systems in place by 2025.

Source: Barry Callebaut.

500,000 farmers out of poverty​

Barry Callebaut sets KPIs for poverty reduction target

The company will focus on doubling productivity to bring 500,000 farmers out poverty.

There are between 2m to 2.5m cocoa farmers in West Africa. Around 1m farmers globally - and roughly 300,000 in Côte D’Ivoire - supply Barry Callebaut, the company estimates.

“We will align each country with the World Bank’s country definition of extreme poverty,”​ said Debenham.

“Sustainable living income has not been defined yet. This [World Bank definition] is a metric that is available and open to the public. And this metric is likely to move – it’s likely to go up and we will follow that metric,” ​he said.

The World Bank’s extreme poverty line in Côte D’Ivoire ($2.40) is higher than the global average of $1.90. The world’s premier cocoa grower has a GDP of $3,400 per capita and five children per family on average.

Barry Callebaut estimates all 500,000 farmers it is targeting are currently below the poverty line.

Chocolate price implications

“It’s not about trying to push the price of chocolate up…we want consumers to be part of this movement… The likelihood is that there will be a price impact, but it won’t be indigestible for a consumer,” said Nicko Debenham. He said Barry Callebaut doesn’t expect to make any money from the strategy, but said it would help its business become sustainable.

The company says it will double farmer yields by providing farmer training and enabling individualized one-year access to credit for inputs such as tools and fertilizer. It will also support 10-year loans for farm rehabilitation programs.

Debenham said the aim was to professionalize the sector so farmers treat farms as businesses.

Why not a higher price?​

Asked why the focus was on productivity rather than paying a higher price, he said: “In the end we are a business, we are not UNICEF or an NGO. If we pay farmers more money we have to find the return for that in the products we sell and inevitably the demand will fall.”​

He added that temporary price increases eventually lead to price volatility and greater cocoa substitution.

“What farmers really want is a gently rising price,” ​he said. We are trying to implement something to make them more resilient to these variable prices.”​

Carbon and forest positive​

Barry Callebaut is aiming for a deforestation-free supply chain and will help to reforest in cocoa growing areas to have a net positive carbon and forest impact.

Source: Barry Callebaut.

The company’s annual carbon footprint is currently at 7.4m CO2e with land use change and transportation the main sources of emissions.

Barry Callebaut also hopes to cut emissions by optimizing transport and factory efficiency and will give preference to ingredient suppliers that reduce their impact on the climate.

The company will track deforestation and reforestation with a mobile app named ‘Katchilé’ used by appointed village coordinators and field agents at farm-level to collect data.

“We really believe that carbon will be taxed within the next five years …it will be a case of a business deciding whether you want to pay a carbon tax, offset or participate in regeneration programs,”​ said Debenham.

Other commodities​

Barry Callebaut is also aiming for 100% sustainable ingredients from all commodities.

The company defines sustainable ingredients as those from certified or verified sustainable sources, such as Cocoa Horizons, Rainforest Alliance, Organic, RSPO, Bonsucro, UTZ, and Fairtrade.

It will mainly leverage its own sustainability program and label ‘Cocoa Horizons’ for cocoa sourcing.

It will develop roadmaps for other commodities and may create verified sustainability programs where none exist.

Source: Barry Callebaut.

In Côte D’Ivoire, it will look to direct cocoa sourcing from cooperatives or from its own Bioparternaire (Biolands) buying structure.

This will mean it moves away from traitants (cocoa buying companies) because it says traitants often cannot trace the cocoa to guarantee sustainability.

The company will report on its progress annually. Barry Callebaut said its strategy goes above the incoming ISO/CEN standard due late 2017.

The strategy was presented to a group of journalists in Yamassoukro, the administrative capital of Côte D’Ivoire this week.